What to Look For in Iowa on January 3rd

After more than one year of near non-stop campaigning, the fate of the 2008 presidential aspirants will largely be determined by the outcome of the January 3rd caucuses in Iowa and the January 8th New Hampshire primary.

It has been almost four decades now that these two states have held the privileged position of being “the first in the nation” contests in the presidential selection process. While other states have resented Iowa and New Hampshire’s role, and have tried to move the dates of their elections in order to reduce the influence of these two early states, the importance of Iowa and New Hampshire has only grown.

Because they are both small states, and because they are the first, to win in Iowa and New Hampshire candidates must engage in what is called “retail politics.” They and their campaigns staffs must personally meet with small groups, hold gatherings in people’s homes, and engage voters, sometimes one at a time.

As a result, the candidates have spent an extraordinary amount of time in each of the two early states, built sizable organizations, and spent substantial amounts of money. The leading Democrats, for example, have each spent almost three months out of the last year in Iowa, while their leading Republican counterparts have spent almost two months each in Iowa. The Obama and Clinton campaigns have each hired 200 staff in Iowa, and have together spent a combined $15 million in advertising on local television.

On the Republican side, former Massachusetts Governor Mitt Romney, who was virtually unknown in Iowa, has spent almost $7 million in advertising in the state. This has boosted him into a leading position in the Republican contest.

Overall, Republicans and Democrats have hired over 1,000 staff in Iowa, have spent over $30 million in paid advertising in the state. In New Hampshire, the totals are about two-thirds that amount.

One impact of this saturation is that the contests in Iowa and New Hampshire are more like local elections for statewide office, or even mayor, than they are national contests. More than a third of voters in these two states report having personally met candidates. This is what Iowans and New Hampshirites have come to expect: shaking the candidates’ hands, asking them tough questions, and sizing them up before they vote. As a result, Iowa and New Hampshire voters act like filters – screening out the candidates who will best be able to compete on the national stage.

But these two states also act as catapults, launching strong campaigns and making them stronger.

During the rest of January, a few other states will hold early elections. For Democrats, Nevadans will caucus on January 19th, and South Carolina will hold its primary on January 26th. For Republicans, Michigan will a primary on January 15th, South Carolinians will vote and Nevadans will caucus on the 19th, and Floridians will vote on January 29th.

Then, on February 5th, twenty states will hold their elections all on the same day.

With this compressed schedule, winning or doing better than expected in Iowa and New Hampshire will serve the critical role of shining a national spotlight on a few strong candidates. Those who do well in these early states will generate substantial media attention – the kind that money can’t buy. This increased attention will also help candidates raise the funds they need to compete in the later states. And winning or doing well in the early states will create momentum for a campaign that will inspire their supporters and win new support from voters in the later states who haven’t yet focused on the elections. Recall, for example, how Jimmy Carter’s victory in Iowa in 1976 launched his ultimately victorious campaign for the presidency.

Conversely, losing or doing worse than expected in Iowa and New Hampshire can literally “suck the life” out of a campaign. Think here of Howard Dean in 2004: he was leading in the national polls, and was expected, early on, to win Iowa. A poor third place finish in Iowa’s caucuses, however, cast him as the loser while catapulting the first and second place finishers, John Kerry and John Edwards into the national eye.

Given this, here’s what to look for on January 3rd in Iowa.

Clinton, Obama and Edwards are locked in what appears to be a close contest. While Clinton and Obama have raised enough money to remain viable candidates through February 5th, they must win or place a strong second in Iowa and New Hampshire to remain strong contenders. Should either of the two fail to win one of these early contests, it could irreparably harm their campaigns.

Edwards must win Iowa, since he has banked on that state to launch his candidacy. Losing in Iowa will, for all intents and purposes, end his candidacy. Should any of the remaining candidates finish a strong third in Iowa, that better than expected performance could gain them the attention needed to compete in later states. Otherwise, lacking funds, most will end their campaigns.

On the Republican side, the picture is fuzzier. Mike Huckabee, like Edwards, has banked on an Iowa win. While Christian conservatives’ displeasure with the rest of the field has pushed Huckabee’s standing in Iowa and in the other early states, he must win in Iowa to generate the funds to be competitive. Mitt Romney, who was the early leader in Iowa and New Hampshire, was counting on wins in these states to give him the national push needed to succeed on February 5th. He must win both Iowa and New Hampshire to remain viable.

John McCain, whose campaign was once thought finished, has been given a second chance by conservatives concerned with the weakness of the other candidates. The endorsements by Iowa’s largest newspaper and the Boston Globe (widely read in New Hampshire) has given his candidacy new life. He must finish in the top three in Iowa and win in New Hampshire to relaunch his candidacy.

Most interesting is Rudolf Giuliani, who largely ignored Iowa, New Hampshire and South Carolina, counting on a Florida win to start his campaign. If he finishes strong in Iowa or New Hampshire, his strategy might work. If he places poorly in both states, however, while another Republican wins or places well in both of the early states, Giuliani’s Florida strategy might backfire.

And watch Ron Paul. He is a “dark horse” on the Republican side. He has raised enough money to be competitive, and developed a fiercely loyal following. Finishing better than expected in the early states could keep Ron Paul in the race until the end.